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Who knows? What are the taxes and costs in buying your first home?
Who knows? What are the taxes and costs in buying your first home?
What are the taxes and costs in buying your first home?
Submitted by: Nathan
My girlfriend and I have saved some money, we both have jobs, we both want to buy our first home.
BUT we have no idea where to start! With all the hidden taxes and costs associated with loans etc! Bankers and real estate agents are all out to get us!!
HELP!
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Comments
'The best place to start is with the amount of deposit that you have – the more that you have the better off that you are. You need at least 5% that you can prove as genuine savings. If you have 20% you are in a great position as you do not have to pay Lenders Mortgage Insurance but rather than maybe confuse you with a full description of what that involves it is enough for you to know that it saves you money if you don’t have to pay it.
Once that is resolved their are basically three things that a lender requires to approve a loan;
1) They will check the credit files of all borrowers to see that there is no bad conduct of accounts on them. You would probably know whether you have had bad credit in the past so lets assume that you are O.K. there.
2) They will do a servicing calculator to see that you have the capacity to repay. This basically involves getting your incomes, deducting a cost of living amount and any other commitments that you have and ensuring that there is enough left to pay the loan with a bit extra left in case interest rates go up.
3) They will do a check to ensure that the property that you are buying is worth as much as the asking price. This protects both yourself and the lender.
Once there are ticks on all three of those boxes the loan is approved.
There is no doubt that there are a lot of fees in the process like stamp duties, solicitors fees etc. Most of these cannot be avoided but some can by choosing a lender with good products and who disclose everything to you up front. You are also in the great position as a first time buyer of getting a lot of charges reduced and also getting $7000 back from the government under the First Home Owners Grant Scheme. A good lender can help you out and lodge all this on your behalf.'